Perhaps Tommy Hilfiger should have talked to Chris Riegal, founder and CEO of software development firm Stratacache, before he introduced virtual reality (VR) headsets to some of his stores around the world late last year.
“Show me a chain retailer that’s going to roll out VR and I’ll show you a CIO that’s going to be out of a job in two weeks,” Riegal declared Tuesday, during a shopper marketing technology trends panel discussion titled at the National Retail Federation’s (NRF) 2016 Big Show, pointing out that there are thousands of technologies being showcased by companies that are “never going to happen.”
“The worst phrase that we hear is the ‘store of the future,’” he continued, “Worry about the store of today.”
That’s not saying, of course, that retailers should shy away from technology altogether. Riegal’s fellow panelists Kevin Carbone, CEO of digital media company PRN, and Forrester Research analyst Sucharita Mulpuru, agreed that interactive experiences are key to success in today’s hypercompetitive market.
“We’re at an inflection point now in retail, particularly in categories like grocery and big box, where the customer experience needs to change and differ if the stores want to continue driving shoppers into the store,” Mulpuru stressed.
Carbone offered, “We’re seeing more purchasing going online because customers can get an unprecedented level of service and pricing online, so it’s imperative for retailers to create a better in-store experience and you can do that by leveraging the technology that’s available.”
Screens are where it’s at, Riegal said, but there has to be a balance to avoid “making it a casino with blinking lights.” Mobile, as far as he’s concerned, should be the big growth path “but it hasn’t really clicked.”
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Carbone noted the merits of using tablet technology, lauding its ability to offer an in-store experience—endless aisle or expanded production selections—that’s similar to how consumers are shopping online.
“It’s an area where you can directly affect the consumer experience in a way that starts to level the playing field with online,” he added.
Fail fast, learn faster
Retailers shouldn’t just take their word for it, however: testing is imperative.
“There has to be a measurement metric. We come into environments all the time where retailers are deploying technology because they think it’s what they have to do,” Riegal said. “All of this technology is measurable and you can see in real time what impact it has in test and control stores.”
Carbone agreed. “It’s about setting up good KPIs at the beginning. There’s nothing better than determining out front what does success look like, what would be failure. What am I trying to achieve? And then moving down the path and testing and learning very quickly, and then optimizing,” he said.
And there’s no such thing as failure.
“What have we learned about consumer behavior in everything that we do? When these things are compared, which factor is more important to the shopper? Those are important insights you can use to fuel your future projects and roll out bigger initiatives,” Mulpuru offered. “Often, retailers will look too strictly at just the ROI. Maybe it was badly executed. Maybe it’s time to revisit something again. Maybe there are findings that are interesting. That’s the difference between Amazon and so many other companies out there that I don’t think are sophisticated.”
The panel also offered some suggestions to retailers who are wary of investing in potentially fleeting technology trends.
“If we’re going to invest in something and put it chain-wide, that’s a huge capital investment that we can’t always afford unless we know there’s going to be a five to 10 year shelf life,” Mulpuru said, pointing out that stores could explore tie-ins with brands as a financial buffer.
“A lot of commoditized brands that are easily replaceable with private label are in a very powerful position to innovate and drive some of these innovations in a physical store because they’re the ones who have a little bit of margin. But retailers are struggling with a lot of the flow of dollars to the web to other competitive forces and these brands are also in a very vulnerable position as well, so to be able to drive some unique experiences is an imperative,” she continued, adding, “Otherwise these dollars are going to go entirely away and go to Amazon.”
Riegal agreed: “Big box or small box, visible retail is not going away any time soon—but boring retail will go away.”